What Is an Independent Contractor?
Independent contractors are self-employed individuals or entities who deliver their services to individuals or entities. They work on specific assignments for a fixed fee that is agreed upon before signing the contract. Unlike regular employees, they do not receive any employment benefits, and they complete their tasks without any supervision from the organization.
Independent Contractors Explained
The category of independent contractors retains a wide range of professionals, including but not limited to doctors, accountants, lawyers, contractors, real estate agents, and other skilled service providers who deliver their expertise to the public. In modern jargon, the term 'freelancers' is usually used to refer to these independent contractors.
Recent times have witnessed a multiplication of new skill sets, leading to an increased majority of self-employment opportunities. The COVID-19 pandemic, in particular, has catalyzed the demand for freelance professionals and specialized contractual roles.
While working as self-employed entities, independent contractors are categorized based on the nature of their working connection with the contracting entity. In general, when the client has control over the services rendered by the self-employed individual, the latter does not qualify as an independent contractor. The main difference between an independent contractor and an employee typically lies in the degree of freedom exercised over the specifics of the work.
The determination of whether an individual truly qualifies as a self-employed independent contractor holds implications primarily in the context of taxation, as tax authorities levy taxes on the income earned through their endeavors at the culmination of each fiscal year. The classification of a self-employed independent contractor in such instances may vary, contingent upon specific factual considerations